Pennews.Net: Embracing the Entrepreneurial Spirit of the USA
Entrepreneurship in America is booming. 2009 and 2010 were slow years for entrepreneurship in the US but starting in 2011 and going forward, Americans have been embracing entrepreneurial activity at record setting pace. There is a confident breed of entrepreneurs in the US that believe they have the skills and talent to start and run a successful business.
According to the 2011 Global Entrepreneurship Monitor (GEM) US Report released by Babson College in conjunction with Baruch College, 12.3 percent of the US population was engaged in some type of entrepreneurial endeavor. Total entrepreneurial activity (TEA) increased by more than 60 percent from 2010 to 2011, a phenomenal achievement.
The report indicates that 29 million American adults aged 18-64 were starting or running a business in 2011. These figures began a trend that has not lost ground for the last three years. Projections for entrepreneurial activity by the end of 2014 are equally strong.
Job Growth Following
40 percent of new entrepreneurs expected to hire five employees or more within five years. It is easy to forget that small businesses created by entrepreneurs account for the biggest sector of the US economy and employment.
While we often associate entrepreneurs with software and other tech services and while it cannot be denied that technology has made it easier than ever to operate a home-based business, the technology sector is not the chief focus of new-age entrepreneurs. With the explosion of Amazon.com, online retail is hugely popular.
The possibility of growing a big business from the roots of a small business seems achievable. Today’s entrepreneurs are confident in their ability, in the marketplace and in how a small startup should be administered.
Another trend that seems to be encouraging the 2014 American entrepreneur is a shift to local products and services. Businesses with neighborhood connections, county connections and regional connections are doing well. The new entrepreneur is not a global businessperson. For all the hype about globalization, less than 20 percent of new business said they expected to sell on a global scale.
A welcome statistic is the demographics of the new entrepreneur. Most are college educated and most have higher household income than do households that do not have an entrepreneur. Many of the new entrepreneurs once worked at big corporations and have parlayed their acquired skills into consulting careers or sector related businesses.
72 percent of the American workforce that have steady employment presently would prefer to be on their own. A poll from Young Invincibles reports that 54 percent of young Americans want to start their own enterprise within the next 5 years.
Why The Surge in Entrepreneurship
There are many reasons that entrepreneurs decide to take the risk of starting a new business. In 2008 and 2009, the tight credit market, the stale economy and high unemployment were factors that were not conducive to new startups. The risks outweighed the potential for gain.
Entrepreneurs have confidence in the economy and in themselves. The boom in home-based businesses has put the entrepreneur in position where the loss from a failed venture is manageable. With low overhead, a good online presence and a strong product, there are profits to be made.
In the lean employment years, some entrepreneurs entered the market out of necessity. Today, the scene is different. According to the Babson – Baruch report, entrepreneurs are choosing to go it alone not from necessity but by choice. There is a strong sense that there are promising opportunities in the marketplace and size does not matter. With a good business model and the right technology, dreams can come true.
Another interesting trend in entrepreneurship is the emerging force that female entrepreneurs have become. The female entrepreneur is welcome to the table and is bringing new, creative ideas to entrepreneurship. Male entrepreneurs seem to have a higher perception of opportunities. Females are more likely to be intimidated by the possibility of failure.
And, there are no racial barriers in 21st century American entrepreneurship. In fact, blacks are twice as likely to become entrepreneurs than their white counterparts (19.7 percent to 9.7 percent).
As might be expected, Americans aged 18-24 are the most likely age class to start and entrepreneurial endeavor. However, 10 percent of Americans aged 55-64 are new entrepreneurs. Surprisingly, 4.5 percent of Americans aged 65 and older intend to start a new business.
When compared to other nations, American entrepreneurs demonstrate the lowest number of persons who fear failure. This high tolerance for failure is the backbone of American entrepreneurship. In the US, entrepreneurial activity is stronger, more diverse and more talented than ever.